The Covid stocks have gotten murdered and most are on life support or dead with the exception of Pfizer (NYSE: PFE). Todos Medical (OTCMKTS: TOMDF) is pretty much in the dead camp. It has 2.5 billion shares and was a dilution machine despite having a very credible business plan and good execution in spurts. The company has some amazing assets like the Videssa breast cancer test which is a blood test that can predict breast cancer before it is picked up on imaging. Over $50 million was put into that asset and about $10 million more gets it to the point of cash flow. They also have a very successful nutraceutical business that goes under the brand Tollovid. The website is up and they are still filling orders every day as people still desire immune protection from Covid even if they have to buy the dietary supplement. The market cap of TOMDF is $1.7 million so it must be a good deal at $.0006 since it has an operating business, but when you look under the hood there is a mountain of debt. It's so big that we aren’t going to give it a number. One of the largest noteholders is Levinston Resources and as the primary noteholder, they made many multiples of what they were owed and were arguably responsible for driving down the company’s price to a point that made them unfinanceable.
Uncollectable Notes
As the situation stands the note holders collectively have tons of debt they can never collect on unless they incentivize management to commercialize the assets. This is their only hope of repayment because their brokers won't let them convert shares of an alternate reporting company. That means a deal has to be in the works and once the restructuring is complete the stock should surge as the noteholders will be incentivized to have the stock price move higher so the company can become fully operational again.
Note Conversion Impossible at Current Prices
Investors that followed TOMDF closely might have noticed that $.008 was a staunch support level that once breached blew through 3 technical support levels to settle in at this $.0005 area. The reason for the breach and the dried up volume is that $.01 is the minimum level that certain stock brokers are allowed to deposit stock. Once the note holder deposited his last conversion the OTC investors noticed the increase in OS and pretty much went on strike and would buy any more stock. This created a perfect storm for the noteholder who eventually decided to liquidate what he had. Now the stock is so low he doesn't have a prayer of depositing any more unless the price goes higher. The uptick in price and recent volume surge is a tell to investors that the noteholder is out of stock to sell. In many social circles TOMDF is a four letter word because of the massive dilution that hit the market, but the reality is that future dilution cannot happen until $.01, and if the debt is squashed into equity it will be at a different price that works for the company and the noteholder. This means that at $.0005 the stock could run 10X+ before encountering any dilution resistance.
The COVID Catalyst
As COVID ramps up this fall Tollovid sales are surely to increase as the cat is already out of the bag that they have a product that actually works in COVID and Long Covid according to their market research survey. If the company releases these COVID sales numbers with investors it's going to give very good insight with respect to its future profitability. News that the company isn’t dead after all will give early investors at these lotto prices a very nice return.
The Patent News
TOMDF just announced a Notice of Allowance for the composition of Tollovid and Tollovir. This patent news is as significant as the Axcella Therapeutics (NASDAQ: AXLA) patent news on Long Covid that moved the stock 300% higher. Todos has a lot of intellectual property related to their 3CL protease inhibitor.
Investment Summary
Lotto plays are indeed risky but for this lotto plater there are too many viable assets within TOMDF to let it slip off into oblivion. A $5000 investment of stock could quickly multiply over the COVID season into something very significant. The recent momentum and buying has upticked the stock and shown alert investors that there isn't a dilution overhang. It's just a posting of buyers and sellers and if the stock continues to climb it will reach a point where the supply disappears and just moves higher on nothing. While it's not known how long it will take to restructure the company and right size or eliminate the debt, the story of TOMDF is not ready for insolvency in at least the near future. TOMDF is a very educated lotto plat that could yield a healthy return for the patient investor.
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Disclosure: Insider Financial and its owners do not have a position in the stocks posted and have posted this article for free without editorial input. A guest contributor wrote this article and solely reflects his opinions.
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